We will live up to responsibilities

CHRISTY Kearney’s article (May 10) on the role of audit in the banking crisis contains a number of significant omissions.

Existing auditing standards, set independently of the auditing profession, do prohibit auditors undertaking work that puts them in a position where they have to audit their own work. These standards also contain significant safeguards to auditor independence, including prohibition on financial interests and business relationships, and restrictions on auditors and their staff joining audit clients. The imminent transposition in Ireland of the EU Statutory Audit Directive will provide statutory underpinning to all of these existing requirements.

Nonetheless, Mr Kearney is right to consider whether better structures can be put in place for the future. Such sentiments were expressed recently by the Taoiseach in his address to the Annual Conference of Chartered Accountants Ireland on May 6. Two issues in particular referenced by the Taoiseach were the current Recommendation from Europe of the Quality Assurance of auditors of Public Interest Auditors and the promised Green Paper from the European Commission on the future role of statutory audit and the regulation thereof. The Minister for Enterprise is considering a consultation carried out on the issue of independent inspections of public interest entity auditors late last year. While we noted concerns at that time around the costs of a state inspection mechanism, Chartered Accountants Ireland will respond to any ministerial proposals in a constructive fashion. We do, however, have confidence in the efficacy of the inspection of audit firms that is carried out by our autonomous regulatory board , CARB.

Finally, we are committed to and already addressing any wrong doing on the part of our own members and member firms to the fullest extent permitted by law. Illegal or unethical behaviour by Chartered Accountants is simply not acceptable. Investigations into specific issues concerning the conduct of our members and member firms in the affairs of Anglo Irish Bank plc are already at an advanced stage. Chartered Accountants Ireland has already indicated its readiness to take part in any general inquiry into the role of auditing and accounting in the current banking crisis. We await the Government’s decision in this regard.

Chartered Accountants Ireland is fully aware of, and takes seriously, the public interest role of the auditing. We will not be found wanting in living up to our responsibilities.

Rónán O’Brien

Director of Communications & Marketing

Chartered Accountants Ireland